NYC Mansion Tax 2026: Everything Buyers and Sellers Need to Know

The New York State Senate and Assembly just released their One-House budget proposals — and if you own, buy, or sell real estate in New York City, you need to pay attention. Both chambers have put forward a dramatic increase to the mansion tax, effective for any transfer or conveyance made after June 1, 2026. As someone who has closed over $500 million in NYC and South Florida real estate, I want to break this down clearly so you understand exactly what it means for you.

What is the mansion tax in New York City?

The mansion tax is a one-time transfer tax paid by the buyer at closing on residential real estate transactions in New York City. Despite its name, it applies to properties well below what most people would consider a "mansion." Under current law, any purchase of $1 million or more triggers the tax. The rate increases at various price thresholds, with higher-value transactions taxed at progressively higher rates.

How is the mansion tax changing under the 2026 proposal?

The proposed Senate/Assembly budget would significantly increase mansion tax rates across the board. Here's a direct comparison of current law versus what's being proposed:

When would the new mansion tax rates take effect?

If passed, the new rates would apply to transfers or conveyances made after June 1, 2026. That means any deal that closes before that date would be subject to current rates. If you are actively considering a purchase or sale in the $1M+ range, timing your closing before June 1, 2026 could result in significant savings.

Will the mansion tax affect me?

It depends on your transaction price. Here's the simple breakdown:

If you're buying or selling under $1 million: the proposed change increases the rate from 0% to 1.425%, which is a new cost that didn't exist before.

If you're in the $5M–$10M range: your rate jumps from 2.25% to 3.675% — that's roughly $142,500 in additional tax on a $10M purchase.

If you're transacting above $25M: the rate climbs from 3.90% to 5.325%, adding over $360,000 in tax on a $25M deal.

For luxury buyers and sellers, this is a material cost increase that absolutely needs to be factored into negotiations, deal structure, and closing timelines.

Why is this mansion tax increase being proposed?

Following calls from Mayor Mamdani and progressive lawmakers for higher taxes on real estate and corporations, both the State Senate and Assembly included these rate hikes in their One-House budget proposals. These proposals represent each chamber's priorities heading into final budget negotiations with the Governor. Nothing is final yet — but both chambers putting this forward gives it real momentum.

Is the mansion tax increase a good idea for NYC?

In my professional opinion — no. New York City is already one of the most expensive places in the world to own real estate. Increasing the tax burden on buyers doesn't make housing more accessible; it makes it less so. Every additional cost at closing either gets priced into the transaction (making sellers accept less) or deters buyers from transacting at all. Less transaction volume means less revenue, less activity, and more pressure on an already strained housing market. This will worsen the City's affordability crisis, not solve it.

What is the difference between the mansion tax and the transfer tax?

These are two separate taxes, and buyers often confuse them. The transfer tax (also called RPTT) is paid by the seller and is based on the gross sale price — it ranges from 1% to 1.825% depending on the price and property type. The mansion tax is paid by the buyer and is the tax being proposed for increase here. In many transactions at higher price points, both taxes apply simultaneously, which is why the combined tax burden at closing in NYC can be substantial.

Does the mansion tax apply to commercial real estate?

No. The mansion tax applies specifically to residential real estate — condos, co-ops, townhouses, and one-to-three family homes. Commercial transactions are subject to different tax structures. However, mixed-use properties can have complex tax treatment depending on how the transaction is structured, and you should always work with a real estate attorney on deals involving mixed-use assets.

How can I oppose the mansion tax increase?

This proposal is not final. It still requires negotiation between the Senate, Assembly, and Governor before becoming law. Your voice matters. Contact your State Senator, Assembly Member, and the Governor directly to share your opposition. Real estate industry organizations including REBNY have been actively mobilizing agents and brokers to push back. The more constituents who speak up, the more pressure legislators feel before signing off on the final budget.

What should I do right now if I'm buying or selling in NYC?

If you have a deal in progress or are actively considering one, the June 1, 2026 effective date matters. Here's what I'd recommend:

1. Talk to your broker about whether accelerating your timeline is feasible.

2. Consult with a real estate attorney to understand your specific tax exposure.

3. Factor the potential new rates into your offer price and negotiation strategy.

4. Stay informed — this is still being negotiated and could change before the final budget is adopted.

About Nile Lundgren

Nile Lundgren is the founder of The Lundgren Team at SERHANT., with over $500 million in career sales across New York City and South Florida. He is a cast member on Netflix's Owning Manhattan, a Fox News contributor, an adjunct professor at Baruch College, and a nationally recognized speaker. Nile represents buyers and sellers in some of the most complex real estate transactions in the country.

Questions about buying or selling in NYC? Reach out to The Lundgren Team.

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